Construction market overview: April

Offsite construction continues to grab the headlines, with the CITB publishing a report on Building Skills for Offsite Construction and announcing training courses for those working in the sector. No doubt these will be needed, as another modular homes factory has been announced, this time by AECOM who plan to use it to provide 3000 modular homes for the Silvertown development in London. See our recently published report UK Offsite Manufacture for details of the exciting potential offered by this sector.

The ONS have released their Construction Output in Great Britain: February 2017 figures, showing that construction output fell by 1.7% compared to January 2017; however output grew by 1.5% on a quarter on quarter basis, making this the 4th consecutive period of growth. Substantiating this positive view the Glenigan Index March 2017 shows value of work starting on site in the 3 months to March was 2% higher than during the same period a year ago, and 2% higher than the final 3 months of 2016.

In contrast to this the Markit/CIPS UK Construction PMI March 2017 report shows a slowdown in construction activity growth from February 2017. The Index registered 52.2 in March 2017, a slight decrease from 52.5 in February 2017, signalling the joint-slowest overall construction output since September 2016.

The CPA have published their Spring Forecast which predicts construction activity rising by 1.3% in 2017 followed by 1.2% in 2018 and 2.3% in 2019 with this mostly coming from house building and infrastructure.

Glenigan report that recent house price and property transaction data indicates activity remains firm in the general housing market, specifically with a positive outlook for private housing. The latest statistics from The DCLG for Help to Buy reports that since the launch of the equity loan scheme up to 31st December 2016, 112,338 properties were brought using the scheme totalling a £5.34bn worth of loans, with first time buyers accounting for 81% of purchases. Complementing the continuing growth of the housing sector.

The Halifax House Price Index reports in March 2017 house prices did not change compared to February, with annual house price growth falling to 3.8% from February’s 5.1%. However the Nationwide House Price Index reports that in March 2017 house prices were 0.3% lower than February and annual house price growth fell to 3.5% from the 4.5% seen in February.

The Government have published their Midlands Engine Strategy demonstrating their commitment to making the Midlands a powerful engine for economic growth. This strategy builds on their modern Industrial Strategy, setting out the actions they are taking to address productivity barriers across the Midlands, enabling businesses to grow their productivity.